The announcement that Waitrose and Ocado have extended their supply and branding arrangement will silence speculation that Marks and Spencer should pursue a relationship with the online retailer.
In a joint announcement this morning (26 May), Ocado and Waitrose revealed that they have extended their existing supply agreement until September 2020.
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Under the deal, Ocado will have the right to sell Waitrose products – as it has since 2002 – and can continue to use the Waitrose logo on its website and fleet of delivery vans.
The agreement provides Waitrose with exclusive partnership rights and Ocado is not considering reaching out to rival retailers, just-food understands.
This news looks set to quell market speculation that Waitrose rival M&S should establish a separate supply relationship with Ocado in order to expand its online food offering.
In an investor note last week, analysts at Investec suggested that new M&S chief executive Marc Bolland could join forces with Ocado to develop an online food business, where the retailer’s “premium convenience food offer” could benefit from “less price-sensitive consumers”.
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By GlobalDataAccording to Verdict Research analyst Neil Saunders, the choice between M&S and Waitrose is a “no brainer” for Ocado.
“Waitrose is the player to partner with. M&S does not provide a full line grocery offer and therefore Ocado would struggle to provide for consumer needs if it were to just partner with M&S. Moreover, Waitrose is a rising star in grocery at the moment whereas much of M&S’s offer appears tired and is not optimally priced,” Saunders told just-food.
While Saunders said that if Ocado could partner with both Waitrose and M&S “it would be a dream ticket” he concluded that “Waitrose would not let that happen”.
